Broker's take: China Everbright's new project will reinforce its market position, says DBS

CHINA Everbright Water won the bid for the Ji'nan Zhangqiu urban-rural integration water supply project in Shandong, which is the first project of its kind undertaken by the company and underscores its success in broadening its research scope, DBS Group Research said on Monday.

The project will also enhance the company's integrated business strength and reinforce its market position, added DBS.

The total investment amount is 3.1 billion yuan (S$630 million), with the project comprising different types of water projects, including water source expansion, urban-rural water supply, reservoir construction, pipeline network construction, and water diversion and replenishment of reservoir.

China Everbright's project wins are already more than four billion yuan year-to-date, substantially higher than the 2.5 billion yuan awarded for the full year of FY2016.

DBS said the significant improvement in deal flow should bring about robust growth in construction revenue, which will subsequently increase operating services and cash flow. It maintains a "buy" rating on the company.